Bayer Earnings Hit by High-Tech Materials Division

the Associated Press

FRANKFURT, Germany (AP) — Flat sales at its materials division held down earnings at German pharmaceutical and chemicals firm Bayer AG as it recorded profit of €397 million ($533 million) in the fourth quarter.

The earnings reported Tuesday compare to a loss of €145 million a year ago, when the company had one-time losses of €945 million including impairment charges on the Schering name, which the company dropped.

Fourth-quarter sales rose 2 percent to €9.19 billion over the same period a year ago.

The company says its earnings picture was "mixed." Its health care and agricultural businesses showed modest sales gains. But Bayer MaterialScience, its division that makes high-tech materials such as polycarbonates and polyurethanes, had only flat sales performance and lost €4 million before interest and taxes.

"Overall business development in the fourth quarter showed a mixed picture," said chief financial officer Werner Baumann. "While HealthCare and CropScience achieved modest sales gains on a currency- and portfolio-adjusted basis, business at MaterialScience was level with the corresponding period of 2010."

The company gave a cautious outlook for 2012, saying earnings would increase slightly "despite an economic situation marked by uncertainty."

For all of 2011, net income increased 90 percent to €2.47 billion, up from €1.301 billion in 2010. Sales increased 4.1 per cent to €36.5 billion.

A large part of the increase in full-year profit occurred because the company had smaller charges of €876 million for 2011, much of it for restructuring and litigation expenses, compared to €1.72 billion in one-time expenses from 2010.

Bayer shares were off 0.4 percent at €55.52 in midmorning trading in Germany.